Can public surveillance promote corporate environmental innovation? The mediating role of environmental law enforcement

Abstract With the increase in public environmental awareness, firms are continuously being required to fulfill environmental responsibilities. Based on stakeholder theory and institutional theory, this study examines the impact of public surveillance on corporate environmental innovation and the mediating role of environmental law enforcement. We selected 30 provinces in China as the research sample from 2011 to 2015. Multiple regression analysis was used to analyze the data by Stata software. We found that public surveillance had a significant positive promoting effect on corporate radical eco‐innovation, but had no significant effect on incremental eco‐innovation; environmental law enforcement had a significant positive promoting effect on both radical and incremental eco‐innovations. In addition, public surveillance was conducive to enhancing environmental law enforcement, which in turn promoted corporate radical eco‐innovation.